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Nonprofit venture proposes radical changes to drug industry

A nonprofit drug manufacturer backed by two Missouri hospital systems plans big changes for the drug industry as it prepares to launch later this year.

The venture, led by Intermountain Healthcare in Utah, is backed by Ascension and SSM Health systems of St. Louis. Trinity Health in Michigan and the Department of Veterans Affairs are also part of the venture.

By sidestepping group purchasing organizations and wholesalers, the venture will make and sell drugs directly to hospitals with the hopes of increasing access and transparency. The venture’s first priority is to stabilize the supply of basic medications that have become scarce, such as antibiotics or saline.

“This facet of the industry is pretty opaque, and we want to be transparent on pricing. We hope that others will follow,” Laura Kaiser, CEO of Creve Coeur-based SSM Health, told the Post-Dispatch.

The joint venture has heard from more than 70 hospital systems, or a third of the market, that were interested in joining.

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